CANADA FX DEBT-C$ half cent weaker after U.S. GDP data disappoints
* C$ at C$1.0281 vs US$, or 97.27 U.S. cents * U.S. GDP data shows growth slowest since Q1 2011 * Canada's current account deficit narrows to C$17.3 bln * Bond prices rise across the curve By Solarina Ho TORONTO, Feb 28 (Reuters) - The Canadian dollar was trading near eight-month lows against the U.S. dollar on Thursday as lackluster U.S. data and ongoing bearish sentiment kept the currency under pressure. The currency weakened after data showed the U.S. economy, the biggest single destination for Canadian exports, barely grew during the fourth quarter. U.S. growth came in below what economists had expected and slipped to the slowest rate since the first quarter of 2011. The U.S. data overshadowed news that Canada's current account deficit narrowed in the fourth quarter of 2012 on stronger exports of energy and food products. The C$17.3 billion ($16.85 billion) deficit was still slightly wider than the C$17 billion forecast. "We saw a little bit of a relief rally yesterday, but it's been quickly snuffed out. American GDP data, it's softer than expected, and that calls into question the North American recovery," said Adam Button, currency analyst at ForexLive in Montreal. "The entirety of the Canadian dollar move in the last two weeks hasn't been driven by one news headline or another. It's been growing disappointment about the worldwide economy." At 9:35 a.m. (1435 GMT), the Canadian dollar was trading at C$1.0281 versus the U.S. dollar, or 97.27 U.S. cents, about half a cent weaker than Wednesday's North American close at C$1.0230, or 97.75 U.S. cents. The Canadian dollar was broadly underperforming a basket of major currencies. Canadian government bond prices were higher across the curve, with the 2-year bond rising 1.5 Canadian cents to yield 0.995 percent and the benchmark 10-year bond adding 21 Canadian cents to yield 1.841 percent.